Georgia’s post-COVID economy is expected to continue to expand in 2024, though it will grow at a slower rate.
According to information from the University of Georgia’s Terry College of Business in its annual economic outlook report, the state should continue to outpace the national GDP growth rate, which is projected to be 0.8 percent in 2024.
At the kickoff of the 2024 Georgia Economic Outlook series, held in Atlanta at the Georgia Aquarium, Terry College of Business Dean Ben Ayers said the state is “well positioned to weather an economic slowdown and our economy will outperform the U.S. economy. The build-out of many large projects in the economic development pipeline and favorable demographics are the main reasons why Georgia will fare better than the nation,” according to a press release from the TCB.
While growth slows this year, economists are predicting Georgia’s unemployment rate will hit 4 percent compared to the 3.4 percent in 2023. This is expected to help reduce wage inflation, and overall inflation is projected to drop to 2.5 percent in the second half of the year.
Ayers stated additional rate hikes by the Federal Reserve are not expected, although inflation-adjusted interest rates will increase as inflation decreases. He said the labor market should be strong enough to ward off a recession, but “the economy will be vulnerable to something else going wrong.”
Overall, Ayers concluded that the forecast “depends on the resilient labor market and the strong financial positions of households to sustain the post-pandemic economic expansion.”
The U.S. Bureau of Labor Statistics’ Southeast Information Office reported that the CPI for the Atlanta region declined 0.1 percent from October to December 2023.
Regional Commissioner Victoria G. Lee stated the bi-monthly decrease in the all-items index was influenced by declines in several indexes, including apparel, gasoline and food at home.
The food index declined 0.4 percent from October to December, reflecting a 0.8-percent fall in the food at home index, according to the report.
Four of the six major grocery store food group indexes declined over the bi-monthly period, led by a 1.8-percent decline in the index for other food at home. However, the fruits and vegetables index rose 2.0 percent over the two-month pricing period.
The food index advanced 3.6 percent for the 12 months ending in December, led by an 8.5-percent increase in the food away from home index, the report stated. The food at home index also increased over the past year, up 0.7 percent.
Five of the six major grocery store food group indexes increased over the last 12 months, including the index for meats, poultry, fish and eggs (2.1 percent). In contrast, the index for dairy and related products declined 4.8 percent over the past year, the report stated.
Kathy Kuzava, president of the Georgia Food Industry Association, said the state’s economy continues to be strong, although economists call for an economic slowdown after the unprecedented growth since 2020. As the 2024 legislative session began on Jan. 8, the state is sitting on more than $16 billion in surplus revenues.
Kuzava said Gov. Brian Kemp shared in his State of the State address that he was “proud Georgia has been named the top state for business for a record 10 years in a row. Georgia’s population continues to grow, and our pro-business climate is attractive to companies who are relocating to Georgia.
“He highlighted that more than $5 billion has been directly returned to Georgia taxpayers through tax rebates and suspension of the state’s motor fuel tax, in addition to enacting the largest income tax reduction in Georgia history.”
She noted that, even with the good news, the state’s economy is slowing.
“Georgia’s state economist Robert Bushman cautioned legislators that Georgia most likely will experience a recession in 2024, but it would be mild. He said he was troubled by lingering inflation, which has eased but is still elevated, and the anxious posture of the federal reserve. He added that rising labor costs, higher mortgage rates and post-pandemic office vacancy rates are also worrisome economic signs.”
Georgia’s grocery industry is doing well, with retailers continuing to invest in remodeling and opening new locations, according to Kuzava. She said those retailers whose customer base is lower income are facing more challenges due to the decrease in emergency allotments of SNAP benefits.
“One Georgia retailer said his customers are getting hit hard from every angle, between higher prices on food and power bills, while receiving less government assistance,” she said. “For working families, their income is not keeping up with inflation. Another retailer mentioned that customers are being much more selective about what they are purchasing.
“Retailers, who are also feeling the increase in their costs, are having to be creative to assist their customers who look to stretch their dollars. Some are seeing a large increase in private label sales, while other customers are trading down in selection of product or purchasing less discretionary items.”
Kuzava added that food banks also are feeling the results of inflation, reporting a 40-percent increase in demand. Feeding Georgia, a network of food banks around the state, reported more than 1.5 million people are facing hunger in Georgia, with 335,720 of those being children.
Challenges continue
Kuzava said retailers’ No. 1 post-pandemic challenge is the serious labor shortage.
“There is no easy answer to attract and retain employees,” she said. “Retailers report finding it difficult to hire, and turnover at all levels is a constant issue.
“John Dunham, president of John Dunham and Associates, spoke at GFIA’s last two annual conventions and shared some sobering statistics. Dunham told our audience the share of teenagers in the work force has risen from a low of roughly a quarter in 2010 to about a third of older teenagers holding down a job since the pandemic. When he was in high school in the late 1980s, over 50 percent of 16- to 19-year-olds held jobs.”
During the governor’s first workforce summit in the fall, Kuzava said a roundtable discussion of business leaders revealed that 40 percent of Georgians graduating from college had never held a job.
“For an industry that relies on teenagers to begin their first job at the grocery store, the declining labor participation rate is alarming,” she said.
The GFIA’s Education Foundation board is continuing to look at ways to keep young people in the industry, including offering a record of more than $170,000 worth of scholarship opportunities for GFIA members and their children.
She also stated there is some good news as supply chain issues are continuing to improve.
“Retailers say they are now having little trouble keeping their shelves stocked,” Kuzava said.
Looking at the issue of organized retail crime, which has been increasing across the country, Kuzava said thieves are getting bolder and – in some areas of Georgia – police are not responding to calls.
“The cost of security and liability insurance have increased drastically for retailers over the last several years,” she said, adding that Kemp has budgeted nearly $1.5 million to establish an Organized Retail Crime and Cyber Prosecution Unit within the Attorney General’s office.
Legislative concerns
According to Kuzava, the need for tort reform is the No. 1 concern of retailers, as well the top priority for the 2024 legislative session.
“The GFIA supports legislation to reduce lawsuit costs, reduce landowner liabilities in negligent security lawsuits and remove the direct action against truck insurers in commercial trucking lawsuits,” she said. “Gov. Kemp and Lt. Gov. Burt Jones have announced that reducing lawsuit costs is a top priority, and we look forward to some much-needed reform.”
Other concerns for GFIA this session include the high cost of credit card processing fees, the delay in licensing for retailers opening a location, any labeling or packaging mandates and local government mandates on shopping carts, plastics or alcohol restrictions.
Redistricting offers opportunities
As 2024 is an election year for all of Georgia’s state senators and representatives, Kuzava noted that many residents will find themselves in newly drawn districts due to redistricting.
“Your grassroots connections will be more important than ever as your GFIA team represents the supermarket industry,” she said. “As legislators may be faced with getting to know new potential voters, it will be the perfect opportunity to introduce yourself and educate them on the challenges associated with running your business.
“If you do not know your elected officials, you are missing out on a key opportunity to influence public policy.”
Read more association news from The Shelby Report.
